"Fleet and direct operating costs weighed on this quarter's performance," said Gil West, Hertz chief executive officer. "We're tackling both issues - getting to the right supply of vehicles at an acceptable capital cost while at the same time driving productivity up and operating costs down. These, along with creating a superior customer experience, will be our focus as we position ourselves to take advantage of strong travel demand in this transition year. We've put the right strategy in place, and I see a clear path for Hertz to generate sustainable and higher earnings for our shareholders." ESTERO, Fla., April 25, 2024 /PRNewswire/ -- Hertz Global Holdings, Inc. (NASDAQ:HTZ) ("Hertz", "Hertz Global" or the "Company") today reported results for its first quarter 2024. OVERVIEW Revenue of $2.1 billion GAAP net loss of $186 million, a negative 9% margin, or $0.61 loss per diluted share Adjusted net loss of $392 million, or $1.28 loss per diluted share Adjusted Corporate EBITDA of negative $567 million, a negative 27% margin, driven by a $588 million increase in vehicle depreciation, of which $195 million related to EVs held for sale GAAP operating cash flow of $370 million; Adjusted operating cash outflow of $697 million and adjusted free cash outflow of $729 million Corporate liquidity of $1.3 billion at March 31, 2024 FIRST QUARTER RESULTS  First quarter revenue was $2.1 billion, up 2% from the first quarter of 2023 and reflected continued strength in rental demand. Increased demand in leisure and rideshare customer channels drove a 9% increase in transaction days. First quarter RPD of $56.68 reflected a decline of 7% year over year, which moderated to 3% in March. In the first quarter, the Company upsized its EV disposition plan by 10,000 vehicles, for a total of 30,000 EVs intended for sale in 2024. The Company incurred a $195 million charge to vehicle depreciation to write down the EVs held for sale which were remaining in inventory at quarter-end to fair value and recognize the disposition losses on EVs sold in the period.  Vehicle depreciation in the first quarter of 2024 increased $588 million, or $339 on a per unit basis, primarily driven by deterioration in estimated forward residual values and disposition losses on ICE vehicles compared to gains in the prior year quarter. Additionally, of the $339 per unit increase, $119 was related to EVs held for sale.  Direct operating expense on a per transaction day basis in the first quarter of 2024 increased by 3% year over year reflecting inflationary pressure as well as elevated collision and damage expense. Excluding collision and damage, DOE per day was flat.  Adjusted Corporate EBITDA was negative $567 million in the quarter driven mainly by a $588 million increase in vehicle depreciation compared to the first quarter of 2023, of which $195 million related to EVs held for sale. The Company commenced a broad fleet refresh during the quarter and has revenue and cost initiatives in place to enhance the Company's future profitability. SUMMARY RESULTS Three Months Ended March 31, Percent Inc/(Dec) 2024 vs 2023 ($ in millions, except earnings per share or where noted) 2024 2023 Hertz Global - Consolidated Total revenues $          2,080 $          2,047 2 % Net income (loss) $            (186) $             196 NM Net income (loss) margin (9) % 10 % Adjusted net income (loss)(a) $            (392) $             126 NM Adjusted diluted earnings (loss) per share(a) $           (1.28) $            0.39 NM Adjusted Corporate EBITDA(a) $            (567) $             237 NM Adjusted Corporate EBITDA Margin(a) (27) % 12 % Average Vehicles (in whole units) 547,492 504,528 9 % Average Rentable Vehicles (in whole units) 529,232 483,288 10 % Vehicle Utilization 76 % 77 % Transaction Days (in thousands) 36,854 33,787 9 % Total RPD (in dollars)(b) $          56.68 $          60.85 (7) % Total RPU Per Month (in whole dollars)(b) $          1,316 $          1,418 (7) % Depreciation Per Unit Per Month (in whole dollars)(b) $             592 $             253 NM Americas RAC Segment Total revenues $          1,739 $          1,730 1 % Adjusted EBITDA $            (488) $             261 NM Adjusted EBITDA Margin (28) % 15 % Average Vehicles (in whole units) 450,585 412,983 9 % Average Rentable Vehicles (in whole units) 433,823 393,512 10 % Vehicle Utilization 77 % 79 % Transaction Days (in thousands) 30,560 27,879 10 % Total RPD (in dollars)(b) $          56.92 $          62.08 (8) % Total RPU Per Month (in whole dollars)(b) $          1,337 $          1,466 (9) % Depreciation Per Unit Per Month (in whole dollars)(b) $             649 $             282 NM International RAC Segment Total revenues $             341 $             317 8 % Adjusted EBITDA $              (27) $                53 NM Adjusted EBITDA Margin (8) % 17 % Average Vehicles (in whole units) 96,907 91,545 6 % Average Rentable Vehicles (in whole units) 95,409 89,776 6 % Vehicle Utilization 72 % 72 % Transaction Days (in thousands) 6,294 5,908 7 % Total RPD (in dollars)(b) $          55.52 $          55.06 1 % Total RPU Per Month (in whole dollars)(b) $          1,221 $          1,208 1 % Depreciation Per Unit Per Month (in whole dollars)(b) $             326 $             120 NM NM - Not meaningful (a) Represents a non-GAAP measure. See the accompanying reconciliations included in Supplemental Schedule II for 2024 and 2023. (b) Based on  December 31, 2023 foreign exchange rates. EARNINGS WEBCAST INFORMATION Hertz Global's live webcast and conference call to discuss its first quarter 2024 results will be held on April 25, 2024, at 8:30 a.m. Eastern Time. The conference call will be broadcast live in listen-only mode on the Company's investor relations website at IR.Hertz.com. If you would like to access the call by phone and ask a question, please go to https://register.vevent.com/register/BI56fe0b7f1062434abaa5ccf4ea43b795, and you will be provided with dial in details. Investors are encouraged to dial-in approximately 15 minutes prior to the call. A web replay will remain available on the website for approximately one year. The earnings release and related supplemental schedules containing the reconciliations of non-GAAP measures will be available on the Hertz website, IR.Hertz.com. UNAUDITED FINANCIAL DATA, SUPPLEMENTAL SCHEDULES, NON-GAAP MEASURES AND DEFINITIONS In this earnings release, we include select unaudited financial data of Hertz Global, Supplemental Schedules, which are provided to present segment results, and reconciliations of non-GAAP measures to their most comparable GAAP measures. Following the Supplemental Schedules, the Company provides definitions for terminology used throughout the earnings release and its rationale on the importance and usefulness of non-GAAP measures for investors and management. ABOUT HERTZ The Hertz Corporation, a subsidiary of Hertz Global Holdings, Inc., operates the Hertz, Dollar and Thrifty vehicle rental brands throughout North America, Europe, the Caribbean, Latin America, Africa, the Middle East, Asia, Australia and New Zealand. The Hertz Corporation is one of the largest worldwide vehicle rental companies, and the Hertz brand is one of the most recognized globally. Additionally, The Hertz Corporation owns and operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets and sells vehicles through Hertz Car Sales. For more information about The Hertz Corporation, visit www.hertz.com. CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS    Certain statements contained or incorporated by reference in this release, and in related comments by the Company's management, include "forward-looking statements." Forward-looking statements are identified by words such as "believe," "expect," "project," "potential," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts," "guidance" or similar expressions, and include information concerning our liquidity, our results of operations, our business strategies, the business environment and other information. These forward-looking statements are based on certain assumptions that the Company has made in light of its experience in the industry as well as its perceptions of historical trends, current conditions, expected future developments and other factors. The Company believes these judgments are reasonable, but you should understand that these forward-looking statements are not guarantees of future performance or results, and that the Company's actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative, that may be revised or supplemented in subsequent reports, such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed or furnished to the SEC. Important factors that could affect the Company's actual results and cause them to differ materially from those expressed in forward-looking statements include, among other things: mix of program and non-program vehicles in the Company's fleet, which can lead to increased exposure to residual value risk upon disposition; the potential for residual values associated with non-program vehicles in the Company's fleet to decline, including suddenly or unexpectedly, or fail to follow historical seasonal patterns; the Company's ability to purchase adequate supplies of competitively priced vehicles at a reasonable cost in order to efficiently service rental demand, including upon any disruptions in the global supply chain; the Company's ability to effectively dispose of vehicles, at the times and through the channels, that maximize the Company's returns; the age of the Company's fleet, and its impact on vehicle carrying costs, customer service scores, as well as on the Company's ability to sell vehicles at acceptable prices and times; whether a manufacturer of the Company's program vehicle fulfills its repurchase obligations; the frequency or extent of manufacturer safety recalls; levels of travel demand, particularly business and leisure travel in the U.S. and in global markets; seasonality and other occurrences that disrupt rental activity during the Company's peak periods, including in critical geographies; the Company's ability to accurately estimate future levels of rental activity and adjust the number, location and mix of vehicles used in the Company's rental operations accordingly; the Company's ability to implement its business strategy or strategic transactions, including the Company's ability to implement plans to support a large-scale EV fleet and to play a central role in the modern mobility ecosystem; the Company's ability to adequately respond to changes in technology impacting the mobility industry; significant changes in the competitive environment and the effect of competition in the Company's markets on rental volume and pricing; the Company's reliance on third-party distribution channels and related prices, commission structures and transaction volumes; the Company's ability to offer services for a favorable customer experience, and to retain and develop customer loyalty and market share; the Company's ability to maintain its network of leases and vehicle rental concessions at airports and other key locations in the U.S. and internationally; the Company's ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy; the Company's ability to attract and retain effective frontline employees, senior management and other key employees; the Company's ability to effectively manage its union relations and labor agreement negotiations; the Company's ability to manage and respond to cybersecurity threats and cyber attacks on the Company's information technology systems, or those of the Company's third-party providers; the Company's ability, and that of the Company's key third-party partners, to prevent the misuse or theft of information the Company possesses, including as a result of cyber attacks and other security threats; the Company's ability to maintain, upgrade and consolidate its information technology systems; the Company's ability to comply with current and future laws and regulations in the U.S. and internationally regarding data protection, data security and privacy risks; risks associated with operating in many different countries, including the risk of a violation or alleged violation of applicable anti-corruption or anti-bribery laws and the Company's ability to repatriate cash from non-U.S. affiliates without adverse tax consequences; risks relating to tax laws, including those that affect the Company's ability to recapture accelerated tax depreciation and expensing, as well as any adverse determinations or rulings by tax authorities; the Company's ability to utilize its net operating loss carryforwards; the Company's exposure to uninsured liabilities relating to personal injury, death and property damage, or otherwise, including material litigation; the potential for adverse changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, including those related to environmental matters, optional insurance products or policies, franchising and licensing matters, the ability to pass-through rental car related expenses, or taxes, among others, that affect the Company's operations, the Company's costs or applicable tax rates; the Company's ability to recover its goodwill and indefinite-lived intangible assets when performing impairment analysis; the potential for changes in management's best estimates and assessments; the Company's ability to maintain an effective compliance program; the availability of earnings and funds from the Company's subsidiaries; the Company's ability to comply, and the cost and burden of complying, with ESG regulations or expectations of stakeholders, and otherwise achieve the Company's corporate responsibility goals; the availability of additional or continued sources of financing at acceptable rates for the Company's revenue earning vehicles and to refinance the Company's existing indebtedness, and the Company's ability to comply with the covenants in the agreements governing its indebtedness; the extent to which the Company's consolidated assets secure its outstanding indebtedness; volatility in the Company's share price, the Company's ownership structure and certain provisions of the Company's charter documents could negatively affect the market price of the Company's common stock; the Company's ability to implement an effective business continuity plan to protect the business in exigent circumstances; the Company's ability to effectively maintain effective internal control over financial reporting; and the Company's ability to execute strategic transactions. Additional information concerning these and other factors can be found in the Company's filings with the SEC, including its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date of this release, and, except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. UNAUDITED FINANCIAL INFORMATION UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended March 31, (In millions, except per share data) 2024 2023 Revenues $                 2,080 $                 2,047 Expenses: Direct vehicle and operating 1,366 1,221 Depreciation of revenue earning vehicles and lease charges, net 969 381 Depreciation and amortization of non-vehicle assets 32 35 Selling, general and administrative 162 221 Interest expense, net: Vehicle 141 111 Non-vehicle 75 51 Total interest expense, net 216 162 Other (income) expense, net 2 9 (Gain) on sale of non-vehicle capital assets — (162) Change in fair value of Public Warrants (86) 118 Total expenses 2,661 1,985 Income (loss) before income taxes (581) 62 Income tax (provision) benefit 395 134 Net income (loss) $                  (186) $                    196 Weighted average number of shares outstanding: Basic 305 321 Diluted 305 323 Earnings (loss) per share: Basic $                 (0.61) $                   0.61 Diluted $                 (0.61) $                   0.61   UNAUDITED CONSOLIDATED BALANCE SHEETS (In millions, except par value and share data) March 31, 2024 December 31, 2023 ASSETS Cash and cash equivalents $                  465 $                  764 Restricted cash and cash equivalents: Vehicle 193 152 Non-vehicle 287 290 Total restricted cash and cash equivalents 480 442 Total cash and cash equivalents and restricted cash and cash equivalents 945 1,206 Receivables: Vehicle 238 211 Non-vehicle, net of allowance of $49 and $47, respectively 975 980 Total receivables, net 1,213 1,191 Prepaid expenses and other assets 751 726 Revenue earning vehicles: Vehicles 17,052 16,806 Less: accumulated depreciation (2,435) (2,155) Total revenue earning vehicles, net 14,617 14,651 Property and equipment, net 667 671 Operating lease right-of-use assets 2,211 2,253 Intangible assets, net 2,862 2,863 Goodwill 1,044 1,044 Total assets $             24,310 $             24,605 LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable: Vehicle $                  632 $                  191 Non-vehicle 502 510 Total accounts payable 1,134 701 Accrued liabilities 883 860 Accrued taxes, net 177 157 Debt: Vehicle 11,846 12,242 Non-vehicle 3,898 3,449 Total debt 15,744 15,691 Public Warrants 367 453 Operating lease liabilities 2,100 2,142 Self-insured liabilities 473 471 Deferred income taxes, net 620 1,038 Total liabilities 21,498 21,513 Commitments and contingencies Stockholders' equity: Preferred stock, $0.01 par value, no shares issued and outstanding — — Common stock, $0.01 par value, 480,430,082 and 479,990,286 shares issued, respectively, and 305,618,038 and 305,178,242 shares outstanding, respectively 5 5 Treasury stock, at cost, 174,812,044 and 174,812,044 common shares, respectively (3,430) (3,430) Additional paid-in capital 6,351 6,405 Retained earnings (Accumulated deficit) 174 360 Accumulated other comprehensive income (loss) (288) (248) Total stockholders' equity 2,812 3,092 Total liabilities and stockholders' equity $             24,310 $             24,605   UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS Three Months Ended March 31, (In millions) 2024 2023 Cash flows from operating activities: Net income (loss) $                  (186) $                    196 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and reserves for revenue earning vehicles, net 1,070 466 Depreciation and amortization, non-vehicle 32 35 Amortization of deferred financing costs and debt discount (premium) 18 14 Stock-based compensation charges 16 21 Stock-based compensation forfeitures (68) — Provision for receivables allowance 31 20 Deferred income taxes, net (414) (135) (Gain) loss on sale of non-vehicle capital assets 1 (162) Change in fair value of Public Warrants (86) 118 Changes in financial instruments 6 108 Other (10) — Changes in assets and liabilities: Non-vehicle receivables (36) (50)